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The online-only startup jewellery retailer, JewelStreet, has launched a round of ‘crowdfunding’ in an attempt to raise £100,000 of investment capital.
Crowdfunding is a way of young companies attracting investment from the general public via an online platform, normally with only small amounts of cash required, but with no equity exchanged.
JewelStreet is using Crowdcube, a leading online crowdfunding platform, and has raised over 30 per cent of its funding target within just 24 hours of the page going live.
Rob Passmore, managing director of JewelStreet, said: “Crowdfunding is a great way for people to own a part of a progressive new business like JewelStreet. Our business plan projects a 14 times multiple return on investment within three years.”
Passmore’s says that, similarly to airlines no longer relying on travel agents, fashion brands no longer rely on the high street for clothing sales. He claims that this model can be adapted to fit the jewellery industry, where he claims ‘norm’ is still to pay 65 per cent to a retail channel to sell the product.
He said: “We believe that with the advent of the internet, this is no longer equitable and there is a groundswell of demand from designers and brands to find a new, direct route to market.”
On the Crowdcube page, where businesses have to provide a written ‘pitch’ to potential investing members of the public, it says: “JewelStreet is this new, direct sales channel where designers receive a full 75 per cent of the retail price. The fact that we have already attracted over 250 designers and brands to open web boutiques on JewelStreet is a testament to this market demand for a change.”
